Canterbury Property Services

Hi all,
I am looking for advice from anyone with experience buying property with this company. How was the experience? I am considering using their services to purchase a new build in the Brisbane area which they will source (along with providing broker & solicitor services). This will be an investment rental which should be cash flow positive/neutral.
There was an old thread on Somersoft however recent experience would be useful.
Particularly, I am interested to see if the price they put on the new build is fair and if there is likely to be capital growth on their properties in the early years.
Any other comments and advice re the company much appreciated.
Cheers

Thanks for the replies. Clarification: they provide the broker services and find the property, however they have a recommended company to provide the legal services (its no in house). Can anyone clarify how the in house broker services are an issue? I understand they make there money from the developer (commission) and broker services (from the bank).

I believe Canterbury work on caplitalising interest. So that rent from all investments go into non deductible loan (PPOR). I have been approached by them as well and told them I would rather source my own property in the same areas they suggested (not from their developers i assume). They all of a sudden lost interest.

There are rulings from ATO that prohibit capitalising interest, however you should obtain individual ruling to see if you are exempt. Perhaps one of the Tax guys on here can inform you better of this.

+ there is big thread on them on InvestEd.

As others suggested avoid one stop shop like the plague.... You are better off getting a buyers agent to source you properties and all things considered you will probably end up paying the buyers agent less than what the one stop shot will get out of you (most of it you wont see).

My brother in law works for a developer and he says they pay anywhere between 5%-15% of the sales price to the one stop shops they use.

Being a long term Canterbury client, I started to read this thread with interest….. then lost interest because of the broad brushes painted to describe the company from people who just don’t know. You can’t guess and double guess from afar and yet still get things right. What I mean is:

1)The comment: “Brisbane, that worries me”. What’s that about? Canterbury acquire properties in every Australian capital city when the timing is right. Of course Sydney has had its run and Brisbane might be next. Yes, Canterbury is based in Brisbane. They have to be based somewhere.

2)Unless we buy second hand properties with very few tax deductions, it is likely a developer will be involved. After-all that’s where new real estate comes from. Can’t see this as a negative.

3)Because someone’s brother in law has experience with other companies who charge high commissions, does not transpose to experience with Canterbury. You cannot extrapolate like that. New laws came in last year whereby all commissions have to be revealed on a form 8. I just looked at mine and it works out to 2.44%. Everyone has to make a living including the people on this forum.

4)The talk of over price does not apply at Canterbury. Every client receives a resale guarantee from day one.

I could just see that this thread was off track. I know investing can be worrying but I had the benefit of having a number of friends already being Canterbury clients. I was able to have a full inside look before I jumped in. With due respect to all, Blue Shark is here asking questions of people who just don’t know. My final comment is to mention that forum sites are often full of industry trolls who disparage other companies and then PM the posters trying to change people to their own services. I know from experience that if you want to know something about Canterbury just ask them. They are very transparent and have been in business 34 years.

If you have been around this site and SS you will see that people on here are encouraging and not trolls. Sure you might find one or two, but they get dealt with quickly. I based my opinion on Canterbury from the conversation I had with their sales representative.

The only reason I spoke to them is because of the longevity they have in the business. However when I started asking more and more, the more irritated the sales representative became. This could be because of the inexperience of that particular person or their lack of knowledge to answer my questions. The main questions I asked them was around capitalizing the interest. it seems the bulk of the strategy is based on that. If that didn't work all the other concepts after capitalisation of interest then become like any other one stop shop agency. That is what they are using to claim that you can knock off years of your mortgage. While this strategy might have been possible years ago, ATO is cracking on people using this now. There are even rulings prohibiting this. However there are few exceptions (health, sudden family difficulties etc.). When I asked them do they get private rulings on matters he told me yes and that there is no need to do it anymore as precedents was set and to trust what they are doing as they have been doing it for xx years.

This was based on my own experience with them, no hear say or friend said this or friend said that...

while my experience was not good. i'm not dismissing them or saying there is anything wrong with them. I'm saying that I don't like how they do things, this also means other might like it.

Thanks for sharing your experience and its good to have a balanced discussion.

Blueshark - It does relate. They don't change the margin they want to get. They build this commission/marketing cost into the price of the property and then their margin on top of that. They only use them when they cant sell the properties themselves. For their last project around 70% were international buyers and they didn't have to use one stop shop.

4)The talk of over price does not apply at Canterbury. Every client receives a resale guarantee from day one.

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Hey Peter, could you let us know how this works? e.g if price is below X after 5 years we will pay the difference or something? I always get suspicious with guarantees. The investment shouldn't need a guarantee and should stand on its own.

Hey Peter, could you let us know how this works? e.g if price is below X after 5 years we will pay the difference or something? I always get suspicious with guarantees. The investment shouldn't need a guarantee and should stand on its own.

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You are correct that the investment should stand on its own and it does. The resale guarantee merely a safety net to protect against an actual loss at any time in the future. I don’t think many Canterbury clients have ever made a claim because you can get more selling via a local agent if you ever need to resell.

If you have been around this site and SS you will see that people on here are encouraging and not trolls. Sure you might find one or two, but they get dealt with quickly. I based my opinion on Canterbury from the conversation I had with their sales representative.

The only reason I spoke to them is because of the longevity they have in the business. However when I started asking more and more, the more irritated the sales representative became. This could be because of the inexperience of that particular person or their lack of knowledge to answer my questions. The main questions I asked them was around capitalizing the interest. it seems the bulk of the strategy is based on that. If that didn't work all the other concepts after capitalisation of interest then become like any other one stop shop agency. That is what they are using to claim that you can knock off years of your mortgage. While this strategy might have been possible years ago, ATO is cracking on people using this now. There are even rulings prohibiting this. However there are few exceptions (health, sudden family difficulties etc.). When I asked them do they get private rulings on matters he told me yes and that there is no need to do it anymore as precedents was set and to trust what they are doing as they have been doing it for xx years.

This was based on my own experience with them, no hear say or friend said this or friend said that...

while my experience was not good. i'm not dismissing them or saying there is anything wrong with them. I'm saying that I don't like how they do things, this also means other might like it.

Thanks for sharing your experience and its good to have a balanced discussion.

Blueshark - It does relate. They don't change the margin they want to get. They build this commission/marketing cost into the price of the property and then their margin on top of that. They only use them when they cant sell the properties themselves. For their last project around 70% were international buyers and they didn't have to use one stop shop.

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Just to clarify, Canterbury don’t get a private ruling from ATO because they don’t claim a deduction for capitalized interest. They only claim the simple interest as they feel the difference is minor and as you said ATO don’t like people claiming deductions for capitalized interest. However as Canterbury pointed out, some clients privately go to the trouble of getting a private ruling and they have been accepted by ATO. Canterbury think that as long as you keep paying off one property then another, this is all a small and academic issue in the overall system. As they said to me, the best place to find out what you need about this is the website of this accounting firm: www.bantacs.com.au. Julia Hartman is an expert on this, she has written two books with Noel Whittaker, and deals direct with ATO on this very subject.

You are correct that the investment should stand on its own and it does. The resale guarantee merely a safety net to protect against an actual loss at any time in the future. I don’t think many Canterbury clients have ever made a claim because you can get more selling via a local agent if you ever need to resell.

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I have learnt in life there is no such thing as a free lunch.

Same as a development selling OTP of 10 units saying you have a 1 in 10 chance of winning a BMW, all they have done is increase the price of the units by 10k (not much) for a 100k car.

So, who pays for the difference if a person sells and gets less? What are the conditions, I would assume it must be a public auction that has been advertised otherwise what if I sold the 500k house to my sister for 300k and then claim 200k from Canterbury?

Thanks for clarifying that. Wish the representative I spoke with was as clear.

I had a look at the website and watched the video. The concept is good, my question is what happens to the interest on the investment property. Don't you have to pay that? I saw their disclaimer saying that you cant claim a deduction on that interest. Which makes sense. But it seems all you are doing is delaying that payment? Instead of paying the interest (which cant be deducted) you are paying down your PPOR interest (which is also not deductible) I don't see how are you making any difference. Well difference is that you can cut down your PPOR loan down to 2 years, but you are increasing the time needed to repay the IP loan by the same amount.
Can you clarify that or am I misunderstanding it?

Thanks for clarifying that. Wish the representative I spoke with was as clear.

I had a look at the website and watched the video. The concept is good, my question is what happens to the interest on the investment property. Don't you have to pay that? I saw their disclaimer saying that you cant claim a deduction on that interest. Which makes sense. But it seems all you are doing is delaying that payment? Instead of paying the interest (which cant be deducted) you are paying down your PPOR interest (which is also not deductible) I don't see how are you making any difference. Well difference is that you can cut down your PPOR loan down to 2 years, but you are increasing the time needed to repay the IP loan by the same amount.
Can you clarify that or am I misunderstanding it?

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I had just drafted a long letter to explain your question about capitalized interest, but deleted it when I realized it made no sense. It seems difficult to explain without a visual element. Think of it this way. The plan is to pay off one property at a time beginning with any non tax deductible loans. Over time your rents and passive income increases exponentially. This allows you to pay off each asset ever faster (including the capitalized interest that temporarily built up) One of the “gods” for the people at Canterbury is a Brisbane man (now dead) who got to the position of completely paying off one house per month. He was not a client of theirs, just someone they knew. Of course no Canterbury client has quite got to that level yet.

Same as a development selling OTP of 10 units saying you have a 1 in 10 chance of winning a BMW, all they have done is increase the price of the units by 10k (not much) for a 100k car.

So, who pays for the difference if a person sells and gets less? What are the conditions, I would assume it must be a public auction that has been advertised otherwise what if I sold the 500k house to my sister for 300k and then claim 200k from Canterbury?

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If Canterbury jacked up their prices to support the resale guarantee, they could not afford to offer the actual resale guarantee for original purchase price. To guarantee a resale at higher than necessary price would not make sense to them or their bankers. It is easier to guarantee a smaller price than a higher price. It’s merely a case that Canterbury feel the initial price is more than fair, situated in a location with better than normal future prospects (white collar, lot of people with university degrees etc). This gives them the confidence to support you if you ran into some bad times (lost job etc) If you just sold it cheap to your sister they would not want a bar of it. You would have to let them sell it. They would resell your $500,000 house for $500,000 or more. They would not pick up the pieces if you made a mess and never told them. As said above this is a safety net in times of need, nothing more.

Ive just watched a few of the Youtube videos... besides the obviously American content , right down to the accent and the terminology used to discuss mortgages, repayments and the like... the concept clearly relies on interest capitalisation, which is most kindly described as worrying. It also assumes massive compounding growth and inflation to drive the $$$$ train, which may have had some merit pre APRA, but is now flawed....and as for the manufactured additional income the videos claim to be achievable.... ie 50K generating 3K per month; those claims are are at best , hopeful....

I mean, 3K per month after tax is 36K per annum after tax, right? That's what the video claims would be available to be deployed onto a mortgage, right??? So it must be after tax, right??? All from just 50K invested???? You realise that's claiming to be a 72% fully franked dividend, right???? Please....

I suspect that like many Qld based marketers, whose models have been able to prosper in an expansionary credit environment for 20-30 years, the post APRA era will likely bring extreme challenges for Canterbury.

I had just drafted a long letter to explain your question about capitalized interest, but deleted it when I realized it made no sense. It seems difficult to explain without a visual element. Think of it this way. The plan is to pay off one property at a time beginning with any non tax deductible loans. Over time your rents and passive income increases exponentially. This allows you to pay off each asset ever faster (including the capitalized interest that temporarily built up) One of the “gods” for the people at Canterbury is a Brisbane man (now dead) who got to the position of completely paying off one house per month. He was not a client of theirs, just someone they knew. Of course no Canterbury client has quite got to that level yet.

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Tell me something, if you knew what they do, would you say you would need them at all? Afterall, they are only there to buy properties for you, buy businesses with instant income streams and margin loans on share portfolios?) Surely, once you know the secret ingredient, one can do all of these on their own?

In my case, I doubt they will look at me since I already have several properties (they won't make the commissions as opposed to someone like maybe you who probably started out with no properties? Correct me if I am wrong here). I have realised that I have been doing say 9 out of the 10 things that they are doing.... and so I hit a road block in terms of finance, as I did not know the 10th strategy... which I now know... That being the 'special professional investor loans' that traditionally, one is not able to obtain.

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